After austerity drive, Pakistan's Imran Khan government set to cut development fund

According to a report in Pakistan-based Dawn News, the saving will be used to increase the budget allocation for water sector projects and deficit financing.

After austerity drive, Pakistan's Imran Khan government set to cut development fund
Pic Courtesy: Reuters

Imran Khan-led Pakistan Tehreek-e-Insaf (PTI) government has decided to cut funds meant for developmental works in the country approximately by Rs 250 billion. According to a report in Pakistan-based Dawn News, the saving will be used to increase the budget allocation for purposes such as water sector projects and deficit financing.

While the previous budget allocation for developmental works stood at Rs 1,030 billion, the government is now working to reduce it to Rs 775 billion. The Dawn News report said that the Planning Commission has released Rs 35 billion for development projects. Notably, the panel had, for the same period last year, released Rs 135 billion.

The priority of the government at this point is water sector projects, with most of the saving expected to be used for the purpose. The Imran Khan government reportedly feels that the budget allocated for the same at present is not sufficient.

This comes even as the Pakistan government has said that the country needs billions of dollars to fulfil its basic needs. Pakistani media had recently reported that Finance Minister Asad Umar had said that the country would need to borrow $9 billion.

“The number that we need to borrow, according to the budget, is $9 billion, but we are trying to address the root cause that compels us to borrow these $9 billion. Of course, we know any measures will take time — maybe even two or three years — to bear fruit,” he had informed the senate , as per a report in Dawn News.

Umar said that plans being formalised would be completed in a week or two and that suggestions would be sought from the country's National Assembly. He however said that knocking on International Monetary Fund's door is an idea still under consideration. Many have been predicting Pakistan to approach IMF for a bailout package.

Notably, Imran Khan-led PTI government has also launched austerity measures. As part of it, first class air travel has been banned for VIPs and senior officials. Also, several luxury cars at the Prime Minister's House have been auction.

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